Georgetown University The Georgetown Center for Business and Public Policy

Creating a 21st Century Universal Service Policy Creating a 21st Century Universal Service Policy John W. Mayo Georgetown University The Georgetown Center for Business and Public Policy (202) Rayburn House Office Building Friday, October 24, 2008

The Cost of Universal Service Source: 2009 fy federal budget, USAC

Can we do more, with less?

The Theory of Universal Service For most goods and services, we do not need a “universal service” policy. Why telecommunications? – –Network externalities – –Political unacceptability of some goods being unavailable to a segment or available only at a high cost (e.g., rural consumers)

The Evolution of Universal Service Policy “one system, one policy, universal service.” “one system, one policy, universal service.” “to make available, so far as possible, to all the people of the United States, a rapid, efficient, Nation-wide, and world-wide wire and radio communication service with adequate facilities at reasonable charges.” “to make available, so far as possible, to all the people of the United States, a rapid, efficient, Nation-wide, and world-wide wire and radio communication service with adequate facilities at reasonable charges.” The FCC and states shall “encourage the deployment on a reasonable and timely basis of advanced telecommunications capability to all Americans …”

The Evolution of Universal Service “Continued progress in the deployment and adoption of broadband technology is vital to ensuring that our Nation remains competitive and continues to create business and job growth.” “Continued progress in the deployment and adoption of broadband technology is vital to ensuring that our Nation remains competitive and continues to create business and job growth.” –Broadband Data Improvement Act –October 10, 2008

The Evolution of Universal Service Goals Corporate and governmental goals may be complementary Corporate and governmental goals may be complementary Move from narrowband to broadband Move from narrowband to broadband Availability/deployment to “deployment and adoption” Availability/deployment to “deployment and adoption”

What have we accomplished and at what price? Narrowband Narrowband –94.6% of household have phone available (3/07) Wireless Wireless –270 million handsets

The Cost of Universal Service Source: 2009 fy federal budget

Moving to the 21st Century… Declare victory and move on to the 21rst century problem! Declare victory and move on to the 21rst century problem! So, moving on to broadband, where are we today? So, moving on to broadband, where are we today?

Broadband Deployment in the United States Source: FCC (2007)